European central banks turn up firepower

GMT
03:05 2011
Friday ,07
October

Frankfurt - UPI

The European Central Bank, in a dour finish to Jean-Claude Trichet\'s term as president, said Thursday it would maintain current interest rates at 1.5 percent.
ECB policy makers also elected to launch a second bond-purchasing program with the expectations of capping the program at $53 billion -- a program that would start in November and last for a year.
The Bank of England also said Thursday its lending rate would remain unchanged, at 0.5 percent, a move that is explained three weeks after a decision is made in a release of meeting minutes. In the BOE\'s tool belt for economic stimulus, the BOE said it would expand its qualitative easing policy with an additional commitment of $116 billion.
The move is expected to put pressure on long-term interest rates, but not make many friends overseas as qualitative easing, also known as printing money, lowers currency values, making imports more expensive and British exports cheaper.
In Frankfurt, Trichet, at his last press conference after eight years of leading the ECB, said \"inflation has remained elevated,\" and was expected to stay above the 2 percent target rate \"over the months ahead.\"
Trichet also acknowledged the \"financing conditions are likely to dampen the pace of economic growth,\" and that, \"the economic outlook remains subject to particularly high uncertainty and intensified downside risks.\"